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24-Month Reliability Outlook (2014–2015)
24-Month Reliability Outlook (2014–2015) Table of Contents 24-Month Reliability Outlook 2014–2015 1 What is the 24-Month Reliability Outlook? 2 How Are We Doing? 3 Expected Load Conditions 7 Supply Adequacy 8 Transmission System Reliability 9 Transmission System Upgrades 11 Current Operating Conditions, Constraints and Potential Adverse Constraints 14 Northwest Region 16 Northeast Region 17 Edmonton Region 19 Wabamun Lake/KEG and Edmonton/Fort Saskatchewan Area Bulk Transmission 20 Central Region 22 South Region 24 North-South Transmission 26 Alberta Intertie Capability 28 Wind Integration 29 Demand Response 30 Highlights of the 24-Month Reliability Outlook 31 In Summary 32 24-Month Reliability Outlook 24-Month Reliability Outlook 2014–2015 Reliable, competitively priced electricity is essential to ensure Alberta’s long-term growth and our continued high standard of living and prosperity. The ability of Alberta’s electric system to meet future load growth depends on continued access to sufficient generation and a robust transmission system. As the Independent System Operator (ISO) in Alberta, the Alberta Electric System Operator (AESO) leads the safe, reliable and economic planning and operation of Alberta’s Interconnected Electric System (AIES). We also facilitate Alberta’s fair, efficient and openly competitive wholesale electricity market which in 2013 had 176 participants and approximately $8 billion in energy transactions. Disclaimer The information contained in this document is for information purposes only. As such, the AESO makes no warranties or representations as to the accuracy, completeness or fitness for any particular purpose with respect to the information contained herein, whether express or implied. While the AESO has made every attempt to ensure information is obtained from reliable sources, the AESO is not responsible for any errors or omissions. Consequently, any reliance placed on the information contained herein is at the user’s sole risk. 24-Month Reliability Outlook PAGE 1 What is the 24-Month Reliability Outlook? The AESO’s 24-Month Reliability Outlook (Reliability Outlook) provides a snapshot of the reliability of Alberta’s electricity grid from the perspective of assessing our ability to meet electricity requirements until the end of 2015. This sixth annual edition of the Reliability Outlook includes information on: n Expected load conditions, supply adequacy and transmission reliability of the AIES n Transmission system upgrades being put in place to meet performance requirements, forecast demand and integration of new generation n Current operating conditions, constraints and potentially adverse conditions that could be avoided through coordinated maintenance plans for generation and transmission facilities n Key market initiatives underway Electric system reliability includes two components: supply adequacy and transmission system reliability. Supply adequacy means ensuring there is enough electric supply (generation) to meet consumers’ demand for power. Transmission system reliability is the ability to withstand sudden disturbances or the unanticipated loss of facilities in the system. One of the AESO’s roles is to ensure the electric system is robust and ready to keep the lights on for Albertans. PAGE 2 24-Month Reliability Outlook How Are We Doing? Over the next two years, Alberta’s economy is expected to grow. According to the Conference Board of Canada, Alberta’s economic growth, as measured by gross domestic product (GDP), will increase by 3.6 per cent in 2014 and three per cent in 2015. Alberta is expected to experience strong economic growth over the next five years and the long term, as investment in the oilsands spurs economic growth and jobs. While new generation has kept pace with demand, growth over the last 10 years has loaded the existing transmission system to its capacity. From 2011 to 2013, annual energy consumption growth was 2.5 per cent, with strong growth in the oilsands sector and continued growth in other industries. Parts of the electric system continue to experience constraints that limit the ability to transmit power between various locations in Alberta. In some parts of the province, constrained transmission lines can strand electricity supply, making it unavailable to the market. In other areas, constraints occur when there is not enough transmission capacity to serve local load. For example: n Transmission must-run (TMR) services are required in the Northwest Alberta and Calgary areas to maintain system reliability n Wind power generation constraints continue in the Southwest Region and are expected to continue until Southern Alberta Transmission Reinforcement (SATR) is fully energized n Some regions (see Table 1, Page 5) experience generation or load constraints when transmission facilities are taken out of service for planned maintenance or by forced outages 24-Month Reliability Outlook PAGE 3 Constraints arising from the addition of new load and generation connections, forced outages, and planned outages (e.g., for maintenance and integrating new facilities) are continuing to impact reliability as demonstrated in Tables 1 to 4. The AESO is meeting this challenge through: n Planning transmission system development n Ongoing emphasis on coordination of planned outages n Developing and implementing reliability standards and operating tools and procedures n Augmenting training and introducing new programs to help system operators manage and maintain system reliability n Developing operating limits and tools in advance of each project stage of transmission development With the addition of new generation and continued demand growth, we expect the level of congestion on the AIES to continue until transmission reinforcement is completed. For the AESO, timely approval and installation of proposed transmission upgrades remain a priority. At the end of 2013, total installed generation capacity on the Alberta system was over 14,568 megawatts (MW) and the record winter season peak demand of 11,139 MW was reached on December 2, 2013. Table 1 summarizes constraint events considered to form part of abnormal operating conditions. Constraints can result from outages for planned maintenance, outages planned for adding new facilities to the grid, or forced outages of transmission elements. Table 2 identifies the number of hours where abnormal operating conditions on different cutplanes resulted in limited transfer capability. There were many periods where the limited transfer capability did not result in constraints. Generation curtailment data is aggregated from the System Controller shift log entries that include start times, end times, affected assets and cause of real-time congestion. Overlapping curtailment directives are counted together when generating assets are located in the same area and are due to the same cause. Overlaps for assets in separate areas are not combined and are counted as separate events. Events are counted as separate if they carry on to the following month. PAGE 4 24-Month Reliability Outlook Table 1: Summary of Transmission Constraint 1 Events on AIES Cutplanes 2009–2013 Cutplane or area 2009 2010 2011 2012 2013 12 42 16 14 13 Keephills-Ellerslie-Genesee (KEG) 2 19 2 18 7 South of KEG (SOK) 1 8 0 0 3 68 96 72 79 25 South of Anderson 1 1 11 7 13 Edmonton Area 0 0 1 7 2 23 13 13 18 17 Fort McMurray Wind Other 2 Table 2: Summary of Abnormal Operation Resulting in Transmission Path or Area Limit Reductions3 2009–2013 (hours per year) Cutplane or area 2009 2010 2011 2012 2013 Fort McMurray 769 990 670 1386 8704 Keephills-Ellerslie-Genesee (KEG) 180 1,121 461 117 122 South of KEG (SOK) 591 1,410 4,871 2420 2,7625 Wind 866 1,490 1,224 1,186 2,557 South of Anderson 0 1,096 58 630 748 Edmonton Area 0 0 15 37 13 166 275 157 249 582 Other Constrained-down generation (CDG) occurs primarily when the amount of power a generator can supply to the system is limited by insufficient transmission capacity. During a CDG event, the AESO System Controller enacts mitigation steps in the sequence specified by ISO Rule Section 302.1: Real Time Transmission Congestion Management (TCM). Tables 3 to 4 on Page 6 provide historical information on CDG volumes, and the duration and frequency of CDG events. The data are categorized into TCM Areas consistent with the definitions given by the Information Documents associated with ISO Rule Section 302.1. Previous reporting of CDG in the 24-Month Reliability Outlook has been based on the transmission line limits enforced during transmission constraint events, rather than on actual in-merit energy that is constrained down during an event. Simply put, when an AESO System Controller (SC) identifies a transmission constraint in an area, a transmission limit is put in place for reliability purposes to prevent generation dispatches above a determined energy level for an area. In previous CDG reporting, the AESO used this level Most of the southwest wind constraints occurred during system normal operation; most other constraints occurred under abnormal operation. 1 These are constraints in AIES areas where operation is not managed by a cutplane. 2 Mostly due to planned or forced maintenance activity. 3 444 hours had 50-130 MW and 426 hours had 160-230 MW reduction in transfer out limit during 2013 for the Fort McMurray area. 4 1,835 hours had 150-300 MW and 927 hours had 400-550 MW reductions in SOK path transfer limit during 2013. 5 24-Month Reliability Outlook PAGE 5 as a proxy for constrained-down generation. However, it is possible that actual in-merit generation varies during the constraint event and, although a constraint may exist for a period of time, the constrained generation volume may be below the initial reported limit. When in-merit generation is below a system limit, no generation is constrained down. In this case, using the system limit to proxy constrained power overestimates CDG volumes. To provide the most accurate representation of CDG volumes, the AESO undertook further analysis of the information available to estimate in-merit CDG 6 (Estimated CDG). The results presented below use volumes of Estimated CDG, and therefore differ from the information presented in previous 24-Month Reliability reports. The AESO believes this new methodology provides a more realistic representation of CDG; however, it remains an estimate, and has limitations due to the process and systems used for data capture. Table 3 provides the estimated GWh amount of generation constrained annually from 2011 to 2013. The AESO notes that the Keephills-Ellerslie-Genesee (KEG) and Northeast areas account for most of the estimated CDG in the period. Table 4 provides the total duration of constraints on an annual basis. Table 3: Annual Total Constrained-Down Generation (GWh) GWh Year Central East 2012-018 Cold Lake 2012-015R Crossfield 2012-017R KEG 2014-004R NorthSouth 2013-002R Northeast 2011-008R Northwest 2011-004R South 2013-009R All 2011 4 0 1 81 5 14 0 3 108 2012 7 0 0 54 0 21 0 1 84 2013 19 0 2 43 1 33 3 2 103 Table 4: Number of Hours with Constrained-Down Generation7 Total Hours Year Central East 2012-018 Cold Lake 2012-015R Crossfield 2012-017R KEG 2014-004R NorthSouth 2013-002R Northeast 2011-008R Northwest 2011-004R South 2013-009R All 2011 84 0 29 304 44 384 0 861 1,465 2012 71 0 10 196 5 335 12 294 932 2013 246 7 193 126 10 503 311 388 1,596 This method looks at the merit order snapshot and estimates the amount of in-merit CDG of assets in the area where the CDG took place. Given this methodology for estimating in-merit CDG, constrained-down wind generation is not included in the Estimated CDG. 6 Number of hours with CDG and number of events will not sum to All as there may be events across multiple Transmission Constraint Management Areas in a particular hour. 7 PAGE 6 24-Month Reliability Outlook Expected Load Conditions Alberta is expected to show steady economic growth over the long term. According to the AESO 2014 Long-term Outlook (LTO), average annual demand is forecast to grow by 4.4 per cent for the next five years. For the 2013–2014 winter season, the Alberta Internal Load (AIL) 8 winter peak demand reached a high of 11,139 MW, surpassing the all-time peak of 10,609 MW; the 2013 summer peak reached a record high of 10,063 MW. Long-term load forecast winter peaks are 11,323 MW for 2014–2015 and 11,811 MW for 2015–2016. On a year-over-year basis, Alberta’s total energy consumption for 2013 was 2.5 per cent higher than 2012. Figure 1 shows AIL yearly actual and forecast peak loads from 2005 to 2015. Actual load for the period November 2013 to November 2015 will depend on factors such as: n Weather conditions n Actions of price-responsive load (approximately 300-350 MW) n New oilsands projects and associated industry coming on stream Figure 1: Annual Actual and Forecast Summer and Winter Peak Loads 12,500 12,000 11,500 Peak AIL (MW) 11,000 10,500 10,000 9,500 9,000 8,500 8,000 2005 Summer Peak 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Winter Peak Alberta Internal Load (AIL) is defined as the province’s total electricity consumption, including losses through transmission and distribution, as well as load served by behind-the-fence generation. 8 24-Month Reliability Outlook PAGE 7 Supply Adequacy This section discusses whether there will be enough generation to supply total electrical demand and meet operating reserve requirements over the next two years. In Alberta, investor-driven market decisions will determine the amount of generation added to the electricity system in the next two years. Information on past development, the status of current development, major supply increases or decreases and a summary of supply adequacy results are discussed. Over the past few years, the province has seen continued investment in generation projects, with approximately 720 MW of net additions in 2012 and 164 MW of net additions in 2013. In 2013, cogeneration and waste heat generation added the most capacity to the system. These additions include cogeneration additions at MEG Energy Corp, the addition of NRGreen Power Ltd., installation of a new waste heat generation near Whitecourt, and a number of capacity increases at existing generation sites. There are 1,171 MW of generation projects under construction that are expected to connect to the grid by November 2015. Additional generation projects that intend to start operations in the next two years include approximately 1,307 MW that have received Alberta Utilities Commission (AUC) power plant approval and an additional 1,675 MW that have been announced corporately or have applied for regulatory approval. Cogeneration facilities make up a large portion of the projects expected to come online in the next two years. This investment is considered to be adequate to meet the growth in demand and compensate for generation retirements. It is expected that existing and new generation is adequate to meet daily peak demand over the next two years, as indicated by the daily supply cushion in the AESO’s supply adequacy assessments. To ensure transmission congestion does not strand a significant amount of generation, it will be necessary to continue to closely coordinate generator and transmission outages. The AESO performs a number of assessments to monitor the ability of supply to serve firm demand and satisfy contingency requirements in the short-to-medium term (one day to 24 months) and the long term (up to five years). These assessments indicate supply reserve margins will be adequate during the next two years, but close coordination of generator and transmission outages is required to ensure adequate supply and to avoid constraint events during the real-time operation. Further information on constraint events can be found at www.aeso.ca PAGE 8 24-Month Reliability Outlook Transmission System Reliability Transmission system reliability—sometimes referred to as operating reliability or system security—is described as the ability of the electric system to withstand sudden disturbances or the unanticipated failure of system elements. In a May 2008 North American Electric Reliability Corporation (NERC) paper, submitted as an information filing to the Federal Energy Regulatory Commission (FERC), the following definition was offered to describe an adequate level of reliability, drawing a distinction between customer service reliability and transmission system reliability: The System: n Is controlled to stay within acceptable limits during normal conditions n Performs acceptably after credible contingencies n Limits the impact and scope of instability and cascading outages when they occur n Facilities are protected from unacceptable damage by operating them within facility ratings n Integrity can be restored promptly if it is lost n Has the ability to supply the aggregate electric power and energy requirements of the electricity consumers at all times, taking into account scheduled and reasonably expected unscheduled outages of system components As it relates to reliability, risk is the likelihood that an event (i.e., an outage or change in operating conditions) will reduce the reliability of the power system to the point that the consequences are unacceptable (e.g., equipment damage or cascading outages). Since sudden disturbances or the unanticipated failure of system elements are unforeseen and not preventable, the AESO needs to plan and operate the electric system so that when these events occur, the effects are manageable and consequences are acceptable as defined in the Alberta Reliability Standards and AESO Reliability Criteria. It is critical to effectively manage risk to ensure the power system is operated within the performance requirements. 24-Month Reliability Outlook PAGE 9 To do this, the AESO assesses system reliability and operability for customer connections and regularly performs operations planning studies to assess the operability and reliability of the transmission system under a broad range of operating conditions. The AESO uses an operating horizon methodology to establish system operating limits (SOLs) and these are implemented through operating procedures that protect generation and transmission equipment from damage that could jeopardize reliability for weeks or even months. The study results are also used to support integration of new generation and transmission facilities and to facilitate the coordination of outages. Reliable system operation depends on a continuously connected and managed power system with synchronized generation, transmission and load. System operators monitor the overall reliability of the power system on a moment-by-moment basis by keeping flows and voltages within established limits while balancing supply with demand. Another safeguard of Alberta’s electric system reliability is the AESO’s adherence to standards and criteria developed by NERC and the Western Electricity Coordinating Council (WECC). The NERC reliability standards and WECC criteria and business practices are central to assessing the adequacy of the existing and future transmission system. With an adequately planned system and prudent operating criteria, we can operate the system reliably while facilitating an open and competitive market. The AESO carries out studies using the standards and reliability criteria on a regular basis. PAGE 10 24-Month Reliability Outlook Transmission System Upgrades One of the AESO’s priorities remains timely approval and implementation of proposed transmission upgrades in order to meet future electricity demand, connect generation, satisfy reliability requirements and upgrade the power system in the public interest of Albertans. These proposed upgrades include improving the transfer capacity of interties that connect Alberta’s transmission system to the neighbouring jurisdictions of Saskatchewan, British Columbia and Montana. Alberta’s electric system reliability is enhanced by these interconnections, which allow us to import power to meet peak demand in the summer and winter and help alleviate power shortages by providing access to additional back-up power in case of sudden equipment failure. To keep pace with Alberta’s continued growth in load and generation and enhance reliability, several transmission upgrades across the Alberta transmission system were completed in 2013. NW Region Projects commissioned in 2013: n A new -30/+50 MVAr synchronous condenser energized at Arcenciel 930s n A new 144 kV line 7L162 between Otauwau 729S and Mitsue 732S n A new 144 kV line 7L172 between Edith Lake 739S and Sarah Lake 743S 24-Month Reliability Outlook PAGE 11 NE Region Projects commissioned in 2013: n A new 240 kV substation Livock 939S and terminated 240 kV 9L57 and 9L10 lines n A new 600 MVAr 240kV phase-shifting transformer at Livock 939S n New 240kV substations; McClelland 957S and Bitumont 941S n A new 240kV line 9L32 from Joslyn 849S to Bitumont 941S to McClelland 957S n A new 240kV line 9L69 between McClelland 957S and Black Fly 934S n New 240 kV substations; Black Spruce 154S and Jack Fish 698S in the Christina Lake area n Three new 138 kV capacitor banks; 10MVAr, 14MVAr and 18MVAr at Winefred 818S n A new 144 kV 7L587 line between Marguerite 826S and Wolf Lake 822S; the existing line 7L87 will be salvaged to remove thermal constraint of the 7L87 n A new 144 kV 7L574 line between Wolf Lake 822S and Bourque 970S; the existing line 7L74 will be salvaged to remove thermal constraint of the 7L74 n A new 144 kV substation; Bourque 970S in the Cold Lake area n Two new 144 kV double circuit 7L160/7L157 lines between Bourque 970S and Mahihkan 837S n One terminal of 7L83 moved from Mahihkan 837S to Bourque 970S Edmonton Region and Fort Saskatchewan Area Projects commissioned in 2013: n A new 500/240 kV transformation substation at Heartland 12S n Two new 500kV lines 1206L/1212L between Ellerslie 89S and Heartland 12S tied and energized at 240kV pending the energization of the 500/240 kV transformer n The 240kV 942L line (71S–13S) was terminated as in-and-out at Heartland 12S and lines numbered as 932L (Lamoureux 71S–Heartland 12S) and 1054L (Heartland 12S–Deerland 13S) n Restringing eight km of 902L between Wabamun 19S and Sundance 210P to higher-rated conductor PAGE 12 24-Month Reliability Outlook Central Projects commissioned in 2013: n A new 240/138kV T3 transformer; Benalto 17S n Three new 138 kV capacitor banks; 50 MVAr at Joffre 535S, 50 MVAr at Prentiss 276S and 27.6 MVAr at Ellis 332S n A new 240kV substation at Oakland 946S n Two new 240kV double-circuit lines 9L70/9L97 between Oakland 946S and Anderson 801S n A new 144 kV substation at Heatburg 948S with 7L16 terminated as in-and-out n A new 144 kV line 7L143 between Stettler 769S and Nevis 766S n A new 240/144 kV transformation substation at Coyote Lake 963S n A new 240 kV line 9L29 between Coyote Lake 963S and Oakland 946S n A new 144 kV line 7L128 between Michichi Creek 802S and Coyote Lake 963S n Two new 240/144 kV transformation substations at Lanfine 959S and Pemukan 932S n A new 240 kV line 9L24 between Lanfine 959S and 946S Oakland n A new 240 kV line 9L46 between Lanfine 959S and Pemukan 932S n A new 240kV line 9L966 between Hansman Lake 650S and Pemukan 932S n A new 144 kV line 7L132 between Oyen 767S and Lanfine 959S n A new 144 kV line 7L127 between Pemukan 932S and Monitor 774S n A new 144 kV line 7L116 between Lanfine 959S and Excel 910S n A new 138 kV substation at Tucuman 478S n A new 240/138 kV transformation substation at Nilrem 574S n The 9L953/953L 240kV line terminated into Nilrem 574S as in-and-out n Two new 138 kV lines 679L/680L between Nilrem 574S and Tucuman 478S n A new 240 kV line 1053L between Ware Junction 132S and Cassils 324S n A new 144 kV line 7LA701 between Heisler 764S and 7LA701 tap off South Region Projects commissioned in 2013: n A 138kV new ENMAX SS-54 substation n A new 240/138 kV transformation substation at ENMAX SS-65 n A new 240 kV substation ENMAX SS-25 for Shepard Connection n Montana–Alberta Intertie (MATL) n A existing 911L line was converted into three lines as 911L (Peigan 59S–ENMAX SS-65), 1080L (ENMAX SS-65–ENMAX SS-25) and 1003L (ENMAX SS-25– Janet 74S) 240kV line 933L between Ware Junction 132S and Anderson 801S n Existing 240 kV 933L (Anderson 801S–W. Brooks 28S) was terminated at Ware Junction 132S with 933L (Anderson 801S–Ware Junction 132S) and 1075L (Ware Junction 132S–W. Brooks 28S) n A new 138kV line 832L between ENMAX 10 and ENMAX 12 n A new 138kV line 693L between Sarcee 42S and ENMAX 10 24-Month Reliability Outlook PAGE 13 Current Operating Conditions, Constraints and Potential Adverse Constraints The following sections describe the operating conditions, system operating limits and potential adverse constraints that might occur in each region of the transmission system during the 2014 summer operating season and to the end of the 2015 time frame of this Reliability Outlook. The operation of the power system in Alberta has two seasons, winter and summer. The winter season is effective from Nov. 1 of the year to April 30 of the following year. The summer season is May 1 to Oct. 31 of the year. Peak demand and thermal facility ratings9 of transmission equipment are typically higher in the winter and lower in the summer. Any planned maintenance on transmission and generating assets that would occur in the summer season will often result in more stress on the transmission system, increasing the potential for operating constraints. When the overall Alberta supply reserve margin is low, most generators are expected to be in service10. High market prices for energy are likely to attract imports, which bring power into the south central part of the transmission system. Higher winter thermal ratings of transmission facilities, and most supply being in merit during peak periods should create a generally sufficient level of transmission reliability for the summers of 2014 and 2015, and winter 2014/2015. As system load continues to grow and generation develops in specific areas, the effects of contingencies (sudden failures or outages on the system) become increasingly pronounced. To manage these risks, close coordination of generator and transmission outages is required to ensure adequate supply and avoid constraint events during real-time operation. The AESO is meeting this challenge through transmission development and continued emphasis on coordination of planned outages and developing enhanced operating tools, real-time studies, procedures and training for our system controllers, and an ongoing emphasis on comprehensive analysis and follow-up should disturbances occur. There continue to be operating challenges in all the regions of the province that require constraint management and special operating procedures, use of transmission must-run (TMR) generation, remedial action schemes (RAS) and coordination of transmission and generation outages. These are described in the following sections. Thermal ratings are the maximum amount of electrical current transmission facilities can conduct over a period of time without overheating and causing permanent damage or violating equipment safety margins. 9 This means a designation applied to an asset dispatched by the system controller that qualifies the asset as eligible to set the marginal price. 10 PAGE 14 24-Month Reliability Outlook Figure 2: Alberta Transmission System Planning Regions 17 Rainbow Lake 18 High Level 25 Fort McMurray 19 Peace River 20 Grande Prairie 22 Grande Cache 23 Valleyview 24 Fox Creek 21 High Prairie 27 Athabasca/Lac La Biche 26 Swan Hills 40 Wabamun 29 Hinton/Edson 38 Caroline Calgary Northeast Central Northwest Edmonton South 37 Provost 42 Hanna 39 Didsbury 57 Airdrie 45 6 Calgary Strathmore/ Blackie 46 High River Region Names 13 Lloydminster 32 Wainwright 36 Alliance/Battle River 35 Red Deer 44 Seebe 56 Vegreville 31 Wetaskiwin 30 Drayton Valley 34 Abraham Lake 33 Fort 60 Sask. Edmonton 28 Cold Lake 43 Sheerness 47 Brooks 49 Stavely 53 Fort MacLeod 54 Lethbridge 52 Vauxhall 48 Empress 4 Medicine Hat 55 Glenwood 24-Month Reliability Outlook PAGE 15 Northwest Region The Northwest Region of Alberta is a geographically large area northwest of the City of Edmonton. It is bordered by Fort McMurray and Athabasca to the east, Hinton and Wabamun to the south, B.C. to the west, and the Northwest Territories to the north. While this region represents approximately one-third of the area of the province, it represents only one-tenth of total demand on the electric system. The Northwest Region includes the Rainbow Lake, High Level, Peace River, Grande Prairie, High Prairie, Grande Cache, Valleyview, Fox Creek and Swan Hills planning areas, but not the Wabamun Lake area. It is connected to the Wabamun Lake area primarily through three 240 kV transmission lines and is connected to the Fort McMurray area through one 240 kV transmission line. The Northwest Region contains approximately 10 per cent of the provincial peak load and is a net load area. Due to this imbalance, the region relies on transfer of power from the Wabamun Lake and Fort McMurray areas. The reliability of the Grande Prairie area is managed by keeping the flow of the Grande Prairie cutplane within its system operating limits which sometimes requires transmission must-run (TMR) services to meet performance requirements as the area does not have sufficient local transmission capacity. The amount of TMR services required depends on whether or not the power transfer to this area exceeds specific limits11 which are specified in Appendix 4 or AESO Rule document Northwest Area Transmission Constraint Management, ID # 2011-004(R). The Rainbow Lake area transmission development approved as part of Northwest Area Transmission Development was completed in 2013, which includes upgrades of 7L64 and energization of a new synchronous condenser at the Arcenciel 930S substation. After these two facilities are upgraded, the Rainbow Lake area transmission system will have the capacity to support area load without any TMR under system normal conditions. Under system-abnormal operation during planned or forced transmission equipment outages, TMR may be required depending on the flow and system operating limit of the Rainbow Lake cutplane12. Transmission facilities commissioned or expected to be commissioned in the Northwest Region during 2014 and 2015 include: n High Prairie 787S 144/72 kV transformation and 7L48/7L06 144 kV lines in/out These additions will improve area transfer capability and voltage control and reduce the dependence of area load on TMR services. 11 Limits are based on transmission system conditions and the amount of base-loaded generation online in real time. 12 ID # 2011-004(R) lists system operating limits of the Rainbow Lake cutplane “RLC”. PAGE 16 24-Month Reliability Outlook Northeast Region The Northeast Region of Alberta is bounded on the north by the Northwest Territories, on the east by the Saskatchewan border, on the west by the fifth meridian, and on the south by the Edmonton, Wetaskiwin, Vegreville and Lloydminster planning areas. The Northeast region includes the Fort McMurray, Athabasca/Lac La Biche, Cold Lake and Fort Saskatchewan planning areas. The Northeast Region is forecast to experience the greatest load growth of any planning region in Alberta over the next 10 years. This is due in large part to growth in the oilsands, including mining, upgrading, and related secondary service industries within the region. Load in the Northeast Region is predominantly industrial and makes up approximately 25 per cent of provincial peak load. The majority of the electrical load and generation in the region is located in oilsands developments north of Fort McMurray, and in the Cold Lake and the Fort Saskatchewan areas. Generation in the region is mainly gas-fired cogeneration, accounting for 3,400 MW of Alberta’s total installed generation capacity. The Fort McMurray area is connected to the transmission system by three 240 kV transmission lines. The area operation in real time is managed by the system operating limits of the outflow and inflow cutplanes as per AESO document Northeast Area Transmission Constraint Management, ID# 2011-008(R). Historically, this area has outflow to the AIES most of the time. The area continues to experience high load growth related to oilsands development and new transmission developments being energized every few months to serve the local area connection projects and to ensure that the local area meets performance requirements. The current transmission system does not have the capacity to supply the entire load of the Fort McMurray area without support from local generation. However, a significant amount of the area generation is baseload industrial cogeneration and, under normal operating conditions, is adequate to support reliable operation. Longer-term plans include the construction of 500 kV lines into this area. With the addition of new 240kV lines 9L84 (Salt Lake Creek 977S to Black Fly 934S) and 9L69 (Black Fly 934S to McClelland 957S), a 240kV loop is formed in the Fort McMurray area. The Fort McMurray area NE 240kV loop increases Fort McMurray area transfer-out capability, which also improves Long Lake and Christina Lake generation contribution under system contingency. It’s expected that in 2015, with the 240kV Dawes substation in service and the Christina Lake 240kV loop formed, Fort McMurray area transfer capability will be further improved. 24-Month Reliability Outlook PAGE 17 Planned outages to integrate new connection projects are expected to continue over the next two years and beyond. The impacts will be mitigated through outage coordination, following AESO rules and practices. The Cold Lake area has surplus generation and thermal constraints on the transmission system during system abnormal operation that are managed through remedial action schemes (RASs). On February 10, 2011, the Alberta Utilities Commission approved the Central East Transmission Development (CETD) Needs Identification Document (NID) for the Central East Region (which includes development in the Cold Lake area) that will address long-term transmission needs. The NID includes construction of two new lines and a substation. In addition, a number of existing 144 kV lines will be upgraded to a higher rating to alleviate existing bottlenecks. This transmission system development will facilitate both projected load growth and the connection of cogeneration facilities in the Cold Lake area. Due to the anticipated delays of the transmission reinforcements to 2013 and 2014, coupled with load growth in the Cold Lake area, new RASs and operating policies and procedures (OPPs) remain under consideration as an interim solution for mitigating transmission constraints. With the expectation of two 90 MW Nabiye units in service at the end of December 2014, under FMM, high-export condition 138kV lines 7L53 from Bonnyville to Irish Creek and 7L117 from Irish Creek to Vermilion could be overloaded. The load growth in the Northeast Region during the last few years is causing constraints on the Northeast planning cutplane (the 240 kV transfer path between Edmonton and Fort Saskatchewan areas) in real-time operation. The commissioning of the phase-shifting transformer at Livock during Q3 2013 and completion of the Heartland Transmission Project during the second half of 2013 will help alleviate these constraints. They will also support local demand in the Heartland area, accommodate future demand in northeast Alberta including Fort McMurray, and provide effective system integration for the Eastern Alberta Transmission Line (EATL) and the Western Alberta Transmission Line (WATL) projects. The Heartland project has benefits to the local area and some 240kV lines (921L, 908L, and 915L) and it is also able to minimize KEG generation curtailment under some contingencies. Operations planning studies are finished to incorporate the Livock 939S phase-shift transformer into system controller procedures. The procedure will provide guidelines on how to operate two phase-shifting transformers (one existing at Keephills 320P and a new one at Livock 939P) in a coordinated manner to mitigate system constraints in the Edmonton Region. Transmission facilities commissioned or expected to be commissioned in the Northeast Region during 2014 and 2015 include: n A new 500/240 kV transformer at Heartland 12S n Number of 240 kV lines, 240/138 kV substations and 144 kV lines in the Fort McMurray area to connect new oilsands projects n A new 144 kV 7L146 line between Bourque 970S and Bonnyville 700S PAGE 18 24-Month Reliability Outlook Edmonton Region The Edmonton Region encompasses the City of Edmonton and includes the Wetaskiwin, Wabamun and Edmonton planning areas. This region is the hub of Alberta’s electric system, comprises over 20 per cent of provincial peak load, and has 4,900 MW of Alberta’s generation capacity. Most of the generation is baseload, coal-fired power located around Wabamun Lake, and flows east and south with smaller amounts flowing north and west. The transmission system in the Edmonton Region has the capacity to serve firm load in the region when all transmission elements are in service and baseload generation is online in the Fort Saskatchewan and Wabamun Lake areas. During 2012, within the City of Edmonton, the condition of aging 72 kV cables surfaced as a concern after preliminary testing. Also, at the City of Edmonton Garneau substation, overload conditions following a contingency were identified on the 72 kV cables. The AESO and EPCOR are developing long-term transmission solutions to mitigate these potential constraints. The 138 kV system south and west of the City of Edmonton is thermally constrained due to increased load in the area. During high load conditions, Category B13 events may overload the 138 kV lines, creating a risk of the system not meeting reliability criteria. When one transmission element is out of service due to planned or forced outages, there are several local area constraints on the 138 kV systems. These constraints and contingencies only affect local areas within the region, and risks are not expected to spread to the 240 kV backbone of the system. The AESO filed the NID South and West of Edmonton Transmission Development http://www.aeso.ca/downloads/R_South_and_West_Edmonton_Area_Transmission_ Reinforcement_Needs_Identification_Document.pdf with the AUC on December 14, 2012 for reinforcement to this 138 kV system. Development is scheduled to be in place by the end of 2015. In the meantime, the AESO has developed a procedure to mitigate overloads in the area during real-time operation. Transmission facilities are commissioned or expected to be commissioned in the Edmonton Region during 2014 and 2015 and include: 13 n Re-terminating existing 909L at Sundance 310P n Re-routing 1043L 240 kV line between Keephills 320P and Petrolia 816S Category B events result in the loss of any single specified system element under specified fault conditions and normal clearing. 24-Month Reliability Outlook PAGE 19 Wabamun Lake/KEG and Edmonton/ Fort Saskatchewan Area Bulk Transmission The Wabamun Lake area has undergone major transmission upgrades as part of the interconnection of the Keephills 3 generator and the related Edmonton Regional 240kV Lines Upgrades (also referred to as the Edmonton Debottlenecking Project). Construction of these transmission system upgrades began in the summer of 2010 and is expected to be completed in 2014. This area currently is operating under temporary system configuration until the final phase of the debottlenecking project is complete14. The AESO system controller mitigated the real time constraints by issuing conscripted TMR to effective area generators and reconfiguring the system whenever possible to reduce TMR requirements. After the debottlenecking project is complete, three 240 kV lines will be in place to transport electricity from the Sundance generating plants to the Edmonton area. Two 500 kV lines and one new 240 kV line will connect the Keephills and Genesee generating plants to the Edmonton area. The 240 kV phase-shifting transformer in the path of the 240/500 kV transformation at the Keephills plant 320P will help mitigate Category B and C15 overloads and, in combination with the phase-shifting transformer at Livock 939S, will facilitate increased transfer capacity to serve the Northeast Region. Operations planning studies were completed in 2011 for the final stage of the Wabamun Lake area transmission upgrade to determine the system operating limits (SOL) of the Keephills-Genesee, South of Keephills-Ellerslie-Genesee (SOK) and Northeast16 cutplanes and to ensure the area operates to the Alberta reliability criteria and standards. The debottlenecking project includes 240 kV line 1043L between Keephills 320P and Petrolia 816S, re-termination of the 909L between Sundance 310P and Dome 665S, and a 240 kV phase-shift transformer at Livock 939S in the Fort McMurray area. 14 15 Category C events result in the loss of two specified system elements under specified fault conditions and include both normal and delayed fault clearing events. The Northeast cutplane consists of four 240 kV circuits: 920L (Clover Bar 987s to Lamoureux 71s), 921L (Castle Downs 557s to Lamoureux 71s), 9L56 (Mitsue 732s to Brintnell 876s) and 9L15 (Brintnell 876s to Wesley Creek 834s). They provide transfer paths for energy to and from the Northeast Region. 16 PAGE 20 24-Month Reliability Outlook The implementation of the revised procedure is being held until the whole project can be commissioned–which has been delayed to address stakeholder concerns. After all the facilities of the project are in place, the operating practices and operator tools will be revised to implement system operating limits as determined by these studies. Having WATL and EATL in service will increase transfer capability and system operation flexibility, reduce constraints, and optimize system losses. For the Keephills-EllerslieGenesee (KEG) area, having WATL in service will significantly improve KEG area transfer capability and result in no limitation for KEG generators under normal or one-element outage when Sunnybrook is fully capable of receiving 1,000 MW. Also, WATL and EATL can be used to mitigate transmission overload in this area under contingency. The reactive support limitations on legislated Power Purchase Arrangement units in the KEG area and Sundance plant can create operational concerns. The AESO continues to work with generator owners and operators to address this issue. 24-Month Reliability Outlook PAGE 21 Central Region The Central Region is located between Edmonton and Calgary and includes the Lloydminster, Hinton/Edson, Drayton Valley, Wainwright, Abraham Lake, Red Deer, Alliance/ Battle River, Provost, Caroline, Didsbury, Hanna and Vegreville areas. This region contains approximately 15 per cent of the provincial peak load and generation capacity totals over 2,000 MW. Area generation is a mix of hydro, coal-fired, wind, biomass and industrial gas-fired cogeneration. The transmission system in the Central Region has the capacity to serve firm loads in the region when all elements are in service during normal operation. When the system is operating with one element out of service (N-1), a number of “next contingency” scenarios can result in voltage violations and/or overloads in different parts of the region. Reliable transmission system operation is maintained through established procedures, system operating limits and AESO–TFO coordination of planned maintenance through weekly system coordination plans. The Central East Transmission Development (CETD) approved by the AUC in 2011 covers 144 kV systems in the Cold Lake area of the Northeast Region and some areas of the Central Region. This development will resolve the existing constraints and facilitate the connection of wind projects, cogeneration and load growth of new pipelines. Due to anticipated delays of some transmission system reinforcements in the Central Region, coupled with load growth and the addition of wind generation in this region, new RAS and procedures are proposed to mitigate constraints in the interim period. Due to additional wind connection requests that were not included in the CETD NID development, some facilities of the CETD are under review. This review will introduce changes to CETD or a separate NID for transmission development for the region to connect customers and ensure the region meets performance requirements. Phase one of the Hanna Region Transmission Development project was completed in the first quarter of 2014. The completion of this project will provide transmission capacity to mitigate existing transmission constraints, meet load growth of major pipeline projects and facilitate connection of new wind projects in the Hanna area. It will also improve the performance of the transmission system with respect to meeting the requirements of applicable Alberta Reliability Standards and significantly increase current system operating limits on the South of Anderson (SOA) cutplane. PAGE 22 24-Month Reliability Outlook The 2012 approved transmission development for the Red Deer and Didsbury areas has a revised target completion date of Q3 2015 and this development is planned to mitigate existing system constraints including thermal overloads on the 138 kV system parallel to the SOK 240 kV path, meet load growth, and connect new generation in the study areas. Transmission facilities commissioned or expected to be commissioned in the Central Region during 2014 and 2015 include: n Addition of a -100/+200 VAr SVC at Lanfine 959S n St. Paul Area Upgrade 7LA92 tap off to Watt Lake 956S n 7L24 termination at Bonnyville 700S n 7L/9L146 line from Bonnyville 700S to Bourque 970S n Kitscoty 705S and lines 7L14/7L130 lines in/out n 7L53/7L117 line clearance mitigation n Bonnyville 700S transformer addition n Kitscoty 6L06 decommission n Rebuild 80L from South Red Deer 194S to North Red Deer 217S n New Wolf Creek 240/138kV Substation 247S n New Hazelwood 240/138kV Substation 287S n Rebuild 755L Piper Creek 247S to Joffre 535S n Rebuild 427L Red Deer 63S to Piper Creek 247S n Rebuild 717L from Red Deer 63S to Sylvan Lake 580S n New Johnson 240/138 kV Substation 281S n Rebuild 717L from Sylvan Lake 580S to Benalto 17S n New 138kV Line from Lacombe 212S to Ellis 332S n Rebuild 80L from South Red Deer 194S to Red Deer 63S n St. Paul Area Upgrades – St. Paul 707S and 7L139/7L70 in/out n St. Paul Area Upgrades – Whitby Lake 819S 144kV CB addition n 7L14 Line clearance mitigation n Rebuild 166L n Salvage 716L from Wetaskiwin 40S to Ponoka 331S n Salvage 80L from Red Deer 63S to Innisfail 214S n Salvage 80L from Ponoka 331S to West Lacombe 958S 24-Month Reliability Outlook PAGE 23 South Region The South Region of Alberta has the Canada-U.S. border to the south and is bordered on the north by the Abraham Lake, Caroline, Didsbury and Hanna areas, and on the west and east by B.C. and Saskatchewan respectively. The region includes Calgary, makes up approximately 30 per cent of the province’s peak load (mainly residential and commercial) and has 3,100 MW of Alberta’s total installed generation capacity. The generation is a mix of hydroelectricity, gas and coal-fired generation, and over 850 MW of wind facilities. The AESO and the transmission facility owner, AltaLink, are developing project schedules and specifications for the Southern Alberta Transmission Reinforcement (SATR) phases one and two. The double-circuit 240kV lines from Bowmanton to Whitla are to be in service in 2014, which will facilitate wind integration in the southeast. Due to new load growth in the southeast area, the transmission constraints in the 138 kV system in the southeast area will continue even after the Medicine Hat 138kV transmission upgrades within the SATR project are completed in 2016, which will move significant load from the existing system to the 240 kV system at Bowmanton substation. Although transmission developments in the southwest were commissioned during 2011 and 2012, some wind generation curtailments will continue to occur under normal system operations until SATR is complete. Once this is done, transmission capacity to support existing and new wind generation in the southwest and southeast will be enhanced. The overload RASs on the southwest system will continue and new RASs may be required as new wind generation comes online before the completion of SATR. These RASs have been installed to ensure the area transmission system meets the performance requirements of Category A, B and C contingencies. The current 138 and 240 kV systems serving south Calgary and High River, and between Calgary and the south of the province, are approaching capacity and will require substantial reinforcement to accommodate load growth, new gas generation connection requests and south-to-north transfers related to new wind generation. The AUC has approved the ENMAX Shepard Energy Center connection-related transmission developments NID for the south-of-Calgary system and the Foothills Area Transmission Development (FATD East) plan, which was filed the with the AUC on July 5, 2012. These transmission developments will improve transfer capacity between Calgary and southern Alberta, meet area load growth south of Calgary, and facilitate the connection of ENMAX’s Shepard gas generation to the AIES. Project components are in service with completion expected in 2015. PAGE 24 24-Month Reliability Outlook The transmission system in the City of Calgary is reaching its limit due to increased load growth, and it is becoming increasingly difficult to arrange maintenance on many transmission facilities. When specific transmission equipment is removed from service for maintenance, the next single contingency can result in uncontrolled loss of load in the area. FATD completion will address these constraints in south Calgary. Based on the AESO 2013 Long-term Transmission Plan (filed on Jan. 31, 2014), the AESO has identified the need for transmission system enhancements to address load growth and constraints in this region and is planning to file NIDs for transmission additions in the near future. Transmission facilities commissioned or expected to be commissioned in the South Region during 2014 and 2015 include: n A new 240 kV 985L between ENMAX SS-25 and Janet 74S n Move termination of 936L and 937L 240 kV lines from Janet 74S to East Calgary 5S n New 240 kV double-circuit 1064L/1065L from Langdon 102S to Janet 74S n New Foothills 237S 240/138 kV substation with two transformers n New 240 kV double circuit 1106L/1107L from Foothills 237S to ENMAX SS-65 n New 240 kV line from ENMAX SS-65 to ENMAX SS-25 n New 138 kV 434L 138 kV line from Foothills 237S to High River 65S n Rebuild 727L 138 kV line for capacity increase n A new 138 kV 646L and re-configure 727L/850L n Replace existing 911L with new 240 kV double-circuit from Windy Flat 138S to Foothills 237S n A new 240 kV switching station at Windy Flats 138S and termination of 240 kV lines at the new substation n 45 MVAr reactor at Bowmanton 244S n New 240 kV double circuit 1034L/1035L lines between Cassils 324S and Bowmanton 244S n New 240 kV double circuit 964L/983L lines between Bowmanton 244S and Whitla 251S 24-Month Reliability Outlook PAGE 25 North-South Transmission The Edmonton to Calgary bulk transmission system is comprised of six 240 kV lines between the Wabamun Lake/Edmonton area and Calgary. These six circuits are collectively referred to as the South of Keephills-Ellerslie-Genesee (SOK) cutplane. These lines transfer baseload coal generation and Brazeau hydro generation to the southern part of the province to meet the major load requirements of the Calgary Region. In 2015, two new HVDC transmission lines are planned to be in operation. The Eastern Alberta Transmission Line (EATL) is owned by transmission facility owner (TFO) ATCO Electric and will connect the Heathfield 2029S converter station, in the vicinity of the Heartland 12S substation northeast of Edmonton, to the Newell 2075S converter station, in the vicinity of the West Brooks 28S substation, west of Brooks. The Western Alberta Transmission Line (WATL) is owned by TFO AltaLink and will connect the Sunnybrook 510S converter station in the vicinity of Genesee Plant, southwest of Edmonton, to the Crossings 511S converter station in the vicinity of Langdon 102S east of Calgary. Unlike alternating current (AC) transmission lines, the amount and direction of power flowing on HVDC transmission lines can be directly controlled either through operator-initiated action or through automatic control devices in response to system conditions. Consistent with the AESO’s operation of the AIES, the EATL and WATL lines will be operated in accordance with reliability criteria. PAGE 26 24-Month Reliability Outlook The AESO will operate these lines in accordance with the following principles: 1. Maintain reliability: The AESO needs to operate the HVDC lines to meet reliability criteria. Accordingly, the HVDC lines will be used to resolve criteria violations under certain system conditions (i.e., contingencies such as one or more transmission elements out of service). 2. Reduce transmission constraints: The AESO is mandated to enable transmission of all in-merit energy and therefore the AESO will operate the HVDC lines to reduce transmission constraints as a priority over loss management or system efficiencies while still maintaining adherence to reliability criteria. Reducing transmission constraints provides improved access to the market. 3. Maximize efficiency: The AESO is mandated to maximize the efficiency of the AIES. The AESO will schedule the HVDC lines to distribute power flows across major transmission lines as efficiently as possible while satisfying the reliability criteria and minimizing transmission constraints. This will result in reduced losses and overall system efficiency improvements. To prepare for integration of the two HVDC transmission lines, various engineering studies are required. The AESO has been conducting numerous studies including those related to: n Establishing the appropriate operating procedures for operation of the HVDC lines n Identifying HVDC power flow levels to minimize system losses n Analyzing power flows to determine adjustments to various cutplane limits n Establishing, in coordination with the TFOs, the operating conditions required to commission the HVDC lines This study work will ensure that the HVDC lines are reliably integrated and optimized to enable the safe, reliable and efficient operation of the AIES. 24-Month Reliability Outlook PAGE 27 Alberta Intertie Capability One 500 kV circuit and two 138 kV circuits between Alberta and B.C. comprise three circuits the Western Electricity Coordinating Council (WECC) defines as Path 1. The current path rating of the B.C. intertie is 1,000 MW in export17 mode and 1,200 MW in import18 mode. However, the actual operating limit is lower, primarily due to the need to stay within equipment limits in the event of generator contingencies within Alberta. The current maximum transfer capability available for scheduling between Alberta and B.C. is 735 MW for exports and 780 MW for imports. The Montana–Alberta Tie Line (MATL), a 230 kV merchant intertie between Montana and Alberta, was energized in September 2013 and is now in service. This intertie is expected to provide an alternate source of energy exchange between Alberta and the Northwest U.S. in the current configuration. MATL has a maximum scheduling transfer capability of 295 MW for imports and 300 MW for exports. The B.C. intertie and MATL are subject to a common scheduling limitation arising from the fact that MATL is under a RAS scheme which results in MATL tripping whenever the B.C. intertie also trips. This means that the two interties combined are a single contingency. The primary factor expected to limit import flows on the combined B.C. intertie/MATL is the requirement to maintain acceptable levels of frequency in Alberta in the event of intertie separation with the WECC while Alberta is importing. To increase the scheduling capability across the combined limit while mitigating the frequency risk, the AESO employs Load Shed Service for imports (LSSi). Depending on Alberta load levels and the availability of LSSi load for arming, combined imports across the B.C. intertie and MATL can be scheduled up to a maximum of 765 MW. Further information regarding LSSi is provided in the demand response section below. Exports can be scheduled to a maximum of 735 MW. The McNeill back-to-back alternating current AC-to-DC converter station that connects Alberta and Saskatchewan is referred to as WECC Path 2. A maximum import and export Total Transfer Capability (TTC) of 153 MW is available. Constraints on either the Alberta or Saskatchewan system may lower the TTC during real-time operation. The Saskatchewan intertie is not subject to the combined import constraints which apply to combined B.C./ MATL flows. Alberta to B.C. 17 B.C. to Alberta. 18 PAGE 28 24-Month Reliability Outlook Wind Integration Wind power in Alberta has seen substantial growth in the last few years. As of September 2014, 1,434 MW of generating capacity from 18 wind farms—nine per cent of total installed generation capacity—was connected to the transmission system. Wind power provided 5.1 per cent of the total energy consumed in Alberta during 2013. There continues to be strong interest in building wind generation with over 2,400 MW of wind generation projects in the project list. The AESO is committed to integrating wind generation while at the same time maintaining a fair, efficient and openly competitive market for the exchange of electricity and without compromising system reliability. The AESO released a discussion paper in December 2010, outlining possible products and market rules intended to support wind capacity in Alberta of 1,500 MW and beyond. Extensive consultation with industry in 2011 culminated with a recommendation paper from the AESO in December 2012. The Phase Two Recommendations are: n Investigate options for allowing wind to participate in the energy market merit order n Explore the need for and development of a new system ramping service, including the possibilities of: – Changes to the regulating reserve technical standards – Options for altering the payment structure of the regulating reserve The AESO continues to pursue the Phase Two Recommendations with an immediate focus in 2014 on introducing a mechanism to allow wind to participate in the energy market merit order. The AESO also continues to conduct analysis exploring the potential need for a ramping service. The AESO will continue to work in consultation with industry stakeholders to develop and implement best practices in wind integration within the Alberta electricity framework. 24-Month Reliability Outlook PAGE 29 Demand Response Demand-side participation is a key component of a fair, efficient and openly competitive market. The first direct way for load customers to participate in the energy market is through responding to the electricity price in the real-time spot market. Load participates in the market by voluntarily reducing demand when pool prices exceed their self-defined price threshold. The AESO publishes a number of reports to help customers manage their consumption during high-priced hours. Load also has the opportunity to participate in the supplemental reserve market by reducing demand when directed by the AESO following a significant loss of generation in Alberta. Load market participants provided approximately 10 per cent of Supplemental Reserve in the past two years. With the implementation of the new contingency reserve standard BAL-002-WECC-AB-2, the AESO is working on enabling load for the provision of Operating Reserves–Spinning. In 2013, 479 MW of load was under contract to provide Load Shed Service for imports (LSSi). LSSi contracts were put in place to support the import capability of the Alberta transmission system. The AESO has recently increased the transfer capabilities of the interties made available through the use of LSSi. The AESO has conducted a review of LSSi and will be pursuing various recommendations to modify LSSi in 2014. As well, the AESO will conduct a competitive process to replace the LSSi contracts which will expire at the end of 2014. PAGE 30 24-Month Reliability Outlook Highlights of the 24-Month Reliability Outlook The Alberta Interconnected Electric System (AIES) will continue to provide an adequate level of reliability using the AESO’s rules, operating practices and procedures. Some congestion on the system is expected to continue due to load growth and new customer connections in several regions. The AESO will continue efforts to coordinate outages and develop operating strategies to minimize constraints until transmission is developed in these areas. The AESO also plans to minimize some constraints through operational strategies with the HVDC lines that are planned to come into service in 2015. The AESO’s priority is timely approval and implementation of proposed transmission upgrades to meet future reliability needs. Supply reserve margins will be adequate during the next two years. Close coordination of generator and transmission outages is required to ensure adequate supply and to avoid constraint events during real-time operation. 24-Month Reliability Outlook PAGE 31 In Summary Information in the 24-Month Reliability Outlook 2014–2015 is provided from the perspective of assessing the AESO’s ability to reliably operate the AIES until the end of 2015. Supporting information and forecasts referred to throughout this document are available at www.aeso.ca This document complements the AESO’s existing publications and supports our commitment to sharing information with market participants, stakeholders and all Albertans in an open and transparent manner. Readers are invited to provide comments or suggestions for future reports. For more information or to give us your feedback, email [email protected] PAGE 32 24-Month Reliability Outlook Blank (Inside Back Cover) Alberta Electric System Operator 2500, 330-5th Avenue SW Calgary, Alberta T2P 0L4 Phone: 403-539-2450 Fax: 403-539-2949 www.aeso.ca www.poweringalberta.com REV 1014